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Car Insurance Discounts for Good Drivers
Discount Car Insurance Rates / Car Insurance Discounts for Good Drivers
Most car insurance companies offer discounts to customers they consider safe drivers. The reasons are obvious. Insurance companies are in the business of managing risk. If most of their customers are safe drivers, a company's overall risk goes down and the company will probably have to pay out less in claims. Discounts for safe drivers typically apply to both the liability and the collision portions of your coverage.
What makes a safe driver? Insurance companies have different definitions and different rules. In general, a safe driver is one who has not had an accident and has not been convicted of a traffic violation for a certain period of time, usually three to five years. Usually, new drivers can also quality for a safe driver discount if they are covered under a policy that has been in effect for a certain length of time (usually three years).
Many car companies give additional discounts to drivers who have completed safety training programs. These discounts do not apply just to new drivers. Some companies offer special discounts to older drivers who take defensive driving classes.
You might be surprised at some other things insurance companies consider when they evaluate how much risk a driver presents. Drivers with good credit ratings typically pay lower rates because, according to statistics, they are less likely to have accidents. The same is true for students who get good grades. According to statistics, good students make good drivers.
Some companies take a slightly different approach to recognizing safe drivers. They give you a small refund on your payment for every six months you don't have an accident.
At least one company is trying an innovative approach to setting rates based directly on your driving habits. The company gives you a device that plugs into your car. The device transmits information about your driving to the company. For example, it might transmit data about the number of miles you drive, your average speed, and the time of day that you do most of your driving. The company then crunches these numbers and comes up with a safe driving score. If you're a cautious driver or you don't put many miles on your car, you could save money with this program.
If your rates have gone up because you have had an accident, the increase is not necessarily permanent. Most companies raise your rates for a period of three years after an accident. After that, your rates will go down unless you have had another accident or you have been convicted of traffic violations.
To attract customers, some companies offer a program called accident forgiveness. Under this program, your rates will go up only slightly, and they might not go up at all, if you have an accident, as long as your driving record is basically clean. Although companies that offer accident forgiveness might not raise your rates, they probably will not give you any sort of safe driver discount if you have had an accident.
Some companies offer no safe driver discount at all. Among those that do, there are some slight but potentially important differences in how they define safe drivers. As with most things related to insurance, it pays to shop around.
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